The G7 should be scrapped: It is an anomaly and an affront

IMD Professor Jean-Pierre Lehmann on the upcoming G7 Summit

The 42nd Summit of the G7 held in Ise-Shima, Japan, should be its last. In fact, it should have been dissolved a long time ago. The G7 is an atavistic anomaly that serves no useful purpose in global affairs; on the contrary, it perpetuates a strong Western bias thus undermining its legitimacy.

French president Valéry Giscard d’Estaing convened the first G6 meeting in Rambouillet, France, on 15-17 November 1975. (Canada joined the following year to make it the G7.) He was joined by Helmut Schmidt of West Germany, Aldo Moro of Italy, Takeo Miki of Japan, Harold Wilson of the UK andGerald Fordof the US.

In 1975 “the West” – of which Japan was unofficially a part since signing theSecurityTreaty with the US in 1952 following the end of the American Occupation – still dominated the world economy and stood shoulder-to-shoulder in the Cold War against the Soviet Union. In realpolitik terms the rest of the planet hardly mattered. 1975, however, also marked the end of what in France were called the “Trente Glorieuses” – the thirty glorious years from 1945 in which West Europeans, Americans and Japanese enjoyed unprecedented growth and prosperity. The spirit of that age was vividly illustrated by the comment of BritishPrimeMinister Harold MacMillan, “you’ve never had it so good”.

In the early 1970s, things started going suddenly and unexpectedly disastrously sour. In May 1972, the Japanese Rengo Sekigun (Red Army Faction) caused the Lod Airport Massacre in Israel, followed in September of that year, the massacre at the Munich Olympics by the Black September Group. Europe and the US had their own terrorist groups, including Baader-Meinhof in Germany and the Italian Brigate Rosse (Red Brigades), and the Charles Manson Family in the US, responsible for the gruesome murder of actress Sharon Tate. The US was facing both domestic (Watergate) and foreign (the humiliating defeat in the Vietnam War) crises.

But most of all, the western economies were going through the first cataclysm since the Depression of the 1930s. The 1973 oil/OPEC crisis caused a series of major shocks, resulting in run-away inflation and rapidly rising unemployment. The Bretton Woods international monetary order was terminated, leading to havoc in foreign exchange markets. There were massive strikes.

Giscard’s purpose in convening the Rambouillet meeting was to bring the leaders of the world’s major economies together, so that they may know each other, so that they may build confidence, and so that they should work cooperatively in addressing major problems and thereby avoid conflict.

It was a bold and imaginative initiative, an illustration of leadership; and, mostly, the G7 served the world well in the ensuing ten to fifteen years. As the world underwent unprecedented transformation in the turn of the century, the G7 lost much of its raison d’être. The West no longer dominated the planet as it had; there were new actors, new scripts and new challenges. This was partly, but ultimately unsatisfactorily, reflected in the establishment of the G20 Summit, first held inWashingtonin November 2008 with the onset of the great financial crisis.

Before coming to the G20, however, the gross ineptitude of the G7 is vividly illustrated by a detour via the G8. In 1998, as the Cold War had ended, the Soviet Union dismantled, while the Russian economy seemed rapidly heading for Third World status, a bit like giving a dog a bone, Russia was invited to join the G7 thereby making it the G8. From the perspective of global economic governance, this move made no sense at all.

But the bias and hypocrisy of the West come across brazenly when six years later, in June 2014, Russia was expelled from the G8 for having invaded Crimea. The Russian attack against Ukraine and the invasion of Crimea were a violation of international law and of human rights. It caused deaths and considerable misery. The invasion of Crimea, however, was very small beer indeed compared to the illegal 2003 UK/US invasion of Iraq; in terms of impact, consequences, deaths, torture, dislocations, refugees, you name it. Although some G7 countries, notably France and Germany opposed the invasion, there was, however, no move to expel the UK and US. This is no more than an illustration of power and realpolitik, but it is hardly inspiring.

The main cause for the imperative of abolishing the G7 as well as the reason for its bias is that it has far too strong a Western presence in its membership. It simply makes no sense at this juncture of the 21ste century that the Western European nations of France, Germany, Italy and the UK should each hold such exalted positions in global governance. The G20 adds more members, though the European 4, along with an official representative of the European Commission – making it the European 5 – remain, but it does not address the anomaly of its basic structure. A proper reflection of 21st century global governance would see the individual European nations dissolved into one EU membership.

In his excellent 2002 publication, High Noon: 20 Global Problems, 20 Years To Solve Them, Jean-François Rischard makes the point that whereas in the last couple of decades virtually everything – markets, demographics, and technologies – have undergone exponential change, institutions at best change in linear fashion. Between transformative realities and existing institutions, there is what he terms a gaping governance gap.

This reality, I have argued, is what caused the death of the WTO Doha Round, which in turn caused the creeping impotence and irrelevance of the WTO itself, ultimately resulting in the collapse of the global multilateral rules-based trade regime. The perpetuation of the G7 in 2016 is an absurd anomaly. It undermines the legitimacy of global governance institutions. A restructured and revitalized G20 may be the answer. To achieve that end, the first step is to do some creative destruction not only on the structure of the G7, but on the spirit that it reflects, namely that Europeans are still endowed with automatic place in the global power seating.

The world has changed dramatically, it will continue to change; in that context the G7 is an anomaly, an affront, and an obstacle to dynamic and equitable global governance in the 21st century.Jean-Pierre Lehmann is emeritus Professor of International Political Economy at IMD. Professor Lehmann teaches on theOrchestrating Winning Performanceprogram.

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